The Challenge

The company received bids from several strategic acquirers but not many met the Mr Lee's expectations. After many decades of building the business, Mr Lee was prepared to accept an offer lower than what the business was worth, largely because it was the offer available at the time.

Strategix Asia’s Role

Strategix Asia was engaged to take Mr Lee’s company through an organised sale process. Prior to accepting the final bid offer, we received many bids which did not meet Mr Lee's price expectation. Mr Lee was almost ready to settle for a slightly less than ideal offer, however we advised against it as it did not justify the strengths of the business which he had painstakingly built over many decades.

In our assessment, the bids received up to that point came from acquirers pricing the company on its present earnings rather than on its worth within a larger group, the difference was a result from the type of acquirer rather than a matter for negotiation.

Outcome / Current Status

Strategix Asia was able to defend the investment opportunity and through its overseas buyer network, was able to secure a Japanese based acquirer who was willing to pay for the premium of control and ASEAN expansion as it believed in the long-term growth fundamentals of the region.

Key Takeaway

A well-established business with strong attributes will be an attractive acquisition target to the right buyer, who may not be the buyer who bids first. Strategix Asia acted in Mr Lee's best interests to wait for the right buyer when the business is fundamentally strong.